Workplace savings to fund ‘32% of retirement income’

People in the UK are expecting almost a third (32%) of their retirement income to come from workplace savings, according to a study.

Aegon polled 14,400 workers and found a further 42% expected their income to come from the government, with the remaining 26% coming from their own savings and investments.

Those aged 18 to 24 expect a lower portion of their retirement income (35%) to come from government benefits, such as the state pension, compared to those who’ve already retired (50%).

Being optimistic or possibly naive, people in this age group still expect to retire at the age of 65.

The UK government is gradually increasing the state pension age to 68 by 2039, meaning those born between 6 April 1970 and 5 April 1978 will have to remain in employment for an extra year before receiving their retirement income.

Steven Cameron, pensions director at Aegon, said:

“The UK’s solution to focus on workplace savings makes it world leading, whereas its decision to increase state pension age is likely to mean expectations from the state pillar remain below the international average.

“While UK employees benefit from the workplace pension focus, the ever increasing numbers of self-employed don’t. This highlights the need to focus on how to improve pension provision for this significant element of the working population.”